Citigroup profits rise 7%, helped by higher interest rates

NEW YORK (AP) — Banking conglomerate Citigroup said its second quarter profits rose by 7% from a year ago, helped by higher interest rates, a lower tax rate and a strong economy.

Citigroup is the first of the big Wall Street banks to report their results this week. All the major banks are expected to report higher profit from a year ago, but investors are expected to be focused on each of the banks' outlook, especially with the global economy slowing down and the Federal Reserve considering lowering interest rates.

Citi said Monday it earned a profit of $4.8 billion, or $1.95 a share. That's up from $4.49 billion, or $1.63 per share, in the same period a year earlier. That's better than the $1.81 per share that analysts were forecasting for the bank, according to FactSet.

Citi had an unexpectedly strong quarter in trading, reporting a 4% gain in trading revenue from a year ago. Previously the bank had been forecasting a decline in trading, as investors remained cautious and weren't willing to make big bets in the market with the uncertainty in the economy.

Citi's global consumer banking franchise also did well, reporting a 3% increase in revenue and an 11% increase in profits. The revenue increase was in part caused by Citi benefiting from higher interest rates, as more consumers are now carrying balances on credit cards that collect interest.

Total revenue across the bank in the quarter was $18.76 billion, up 2% from a year earlier. That's better than the $18.5 billion that analysts were expecting.